Raphael Stevens

Stellantis is laying off roughly 400 U.S. salaried employees in its engineering, technology and software organizations to cut costs.
The automaker on Friday said the layoffs would affect about 2% of employees in those units “after rigorous organizational reviews.”
The cuts are effective March 31.
The layoffs occurred during a “mandatory remote work day” for U.S. salaried, nonunion employees in its engineering and technology organization.

The Stellantis sign is seen outside the FCA Headquarters and Technology Center in Auburn Hills, Michigan, on Jan. 19, 2021.
Jeff Kowalsky | Afp | Getty Images

DETROIT — Stellantis is laying off roughly 400 salaried employees in the U.S. in its engineering, technology and software units to cut costs as the automaker faces what it calls challenging market conditions.
Stellantis on Friday said the layoffs would affect about 2% of employees in those units “after rigorous organizational reviews.” Stellantis employed 11,800 U.S. salaried employees as of the end of last year.

The cuts are effective March 31.
“As the auto industry continues to face unprecedented uncertainties and heightened competitive pressures around the world, Stellantis continues to make the appropriate structural decisions across the enterprise to improve efficiency and optimize our cost structure,” the company said in an emailed statement.
A spokeswoman for the automaker declined to discuss the exact number of employees who are being laid off. A source familiar with the actions confirmed it at about 400 workers, a number first reported Friday by The Wall Street Journal.
The layoffs occurred during a “mandatory remote work day” for U.S. salaried, nonunion employees in Stellantis’ engineering and technology organization, according to an internal announcement confirmed by two sources who were not authorized to speak about the actions.
The action is the latest by Stellantis CEO Carlos Tavares to cut costs through layoffs, buyouts and other methods since the company was established through a merger of Fiat Chrysler and French automaker PSA Groupe in 2021.

The cuts are part of a push to achieve Stellantis’ “Dare Forward 2030” strategic plan that aims to increase profits and double the automaker’s revenue to 300 billion euros, or $335 billion, by then, among other targets.
“While we understand this is difficult news, these actions will better align resources while preserving the critical skills needed to protect our competitive advantage as we remain laser focused on implementing our EV product offensive and our Dare Forward 2030 strategic plan,” the company said.

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There are now more than 5.5 million Americans with liquid investible assets of more than $1 million, up 62% over the past decade.
The population of millionaires in the U.S. over the past five years has grown nearly twice as fast as China’s.
Altogether, the U.S. has become both the dominant market and source of growth for the high-net-worth economy.

Vm | E+ | Getty Images

A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.
The U.S. has rapidly overwhelmed China as the world’s top spot for millionaires and billionaires, according a new report.  

There are now more than 5.5 million Americans with liquid investible assets of more than $1 million, up 62% over the past decade and well above the global growth rate of 38%, according to the 2024 USA Wealth Report from Henley & Partners and New World Wealth.
Over the past five years, the population of millionaires in the U.S. has grown 35%, nearly twice as fast as China’s. The U.S. is now home to 37% of the world’s millionaires, up from 35% in 2018.
The divergence grows even more at the top of the wealth ladder. The U.S. has 9,850 centi-millionaires — those worth $100 million or more — compared with China’s 2,352. The U.S. has about 788 billionaires to China’s 305.
“The USA remains the world’s undisputed leader in private wealth creation and accumulation,” according to the report.
Dominic Volek, group head of private clients at Henley, said the strict Covid lockdowns in China coupled with increases in its government intervention in the private sector have slowed the growth in wealth creation.

“China has certainly slowed a lot due to these elements and the U.S. has benefited,” he said.
The shift from China to the U.S. is also reflected in wealth migration patterns. A net 13,500 Chinese millionaires left China in 2023, marking a new record. The U.S. had a net inflow of 2,200 millionaires in 2023 and a projected inflow of 3,500 in 2024, according to the Henley report.
“The USA remains a top draw for wealthy tech entrepreneurs and engineers, especially from Asia, Europe, and the UK,” the report said. 
America’s leadership in wealth creation is spilling over into spending and investing. A report from UBS and Art Basel finds that the U.S. is the leader in global art sales, accounting for 42% of sales by value. The U.S. also leads the world in sales of the highest-priced works.
Bain now predicts that China will account for only 35% to 40% of global luxury goods consumption by 2030, up only slightly from current levels. Overall luxury spending in China is about 40% below where it was in 2019, according to Bain. Luxury sales in the U.S. last year totaled $80 billion, to China’s $52 billion, Bain found.
While analysts and economists say China will still be a major source of luxury and wealth growth in the coming years, the U.S. has become both the dominant market and source of growth for the high-net-worth economy.
“The wealth creation opportunities in the U.S. are second to none globally,” Volek said.
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DraftKings is suing a former executive, Michael Hermalyn, in federal court claiming he stole corporate secrets for Fanatics and tried to poach VIP customers.
The sports betting giant accuses Fanatics of working to clone its business.
Fanatics alleges DraftKings is punishing Hermalyn for leaving for a better job and scaring off other employees who consider leaving.

Fanatics founder and CEO Michael Rubin at his office in New York.
The Washington Post | Getty Images

Sports merchandise giant Fanatics is firing back against sportsbook giant DraftKings in an ongoing legal fight over Fanatics’ hiring of a top DraftKings executive.
In a legal brief filed late Thursday in U.S. District Court in Massachusetts, Fanatics accuses DraftKings of distorting reality and character assassination of its former senior vice president of business development, Michael Hermalyn.

In February, Hermalyn accepted a position as the president of Fanatics VIP and head of Fanatics’ Los Angeles office. He reports directly to CEO Michael Rubin.
DraftKings is suing Hermalyn in federal court, arguing he downloaded confidential company documents and tried to recruit other employees away from DraftKings.
Fanatics alleges in its filing that DraftKings has a “culture of retribution” and is making an example of Hermalyn to instill fear in other “DK employees looking to jump ship.”
By its count, 186 DraftKings employees have applied to work at Fanatics since the company announced in 2021 it would launch a sportsbook, according to the filing.
In the rapidly expanding sports gambling industry, Fanatics is the newcomer, late to the game but backed by billionaire Rubin and an enviable database of customers who buy team jerseys and ball caps online or sports memorabilia through its collectibles business.

The entrance from the elevators, designed to resemble a tunnel entering a stadium, is pictured at the DraftKings office in Boston.
David L. Ryan | The Boston Globe via Getty Images

DraftKings ranks No. 2 in sports betting market share, behind FanDuel, which is owned by Flutter. But those two leaders dominate, with roughly 80% market share between them.
And the competition is fierce — with even well-known gambling brands like Caesars and BetMGM fighting for customers’ dollars. They’re investing in technology to improve their apps, individualize marketing and promotions, and make deposits and withdrawals easier. Much of that is proprietary.
But sports gamblers are notoriously promiscuous. They chase promotions or the best odds and many have more than one betting app downloaded on their phones.
The most valuable customers, the VIPs, work with casino or sportsbook hosts, who build relationships and try to engender loyalty.
DraftKings alleges Hermalyn reached out to one of DraftKings’ most valuable customers to alert him that Hermalyn would be leaving his employer.
“The evidence against Mr. Hermalyn is open-and-shut. He stole valuable trade secrets, destroyed evidence to cover his tracks and then lied about it all,” said Orin Snyder, an attorney with Gibson Dunn representing DraftKings, in a statement to CNBC on Thursday.
In a brief filed March 14, DraftKings details what it describes as corporate espionage. Fanatics, it insists, is trying to steal its VIPs, its valuable employees and its strategy to clone DraftKings’ business.
Fanatics in its response vehemently denies those allegations, and says DraftKings is intentionally distorting reality and engaging in character assassination.
“To be clear, this is not a case in which an employee was hired to move a book of business from one company to another: Fanatics already has 100 million customers in the U.S., each of DK and Fanatics have tens of thousands of VIP customers, and it is well known that many if not all those customers overlap,” the company said in its filing.
DraftKings had petitioned the court to keep Hermalyn from working for Fanatics. The judge declined that petition but issued a temporary restraining order to keep Hermalyn from soliciting clients or employees from his former employer.

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NBC’s live coverage of the 2024 Paris Olympics opening ceremony on July 26 will play on more than 150 IMAX screens in the U.S.
This is the first Summer Olympics opening ceremony that will not be held in a stadium. Instead, organizers are sending Olympians down the River Seine on a four-mile-long flotilla of nearly 100 boats.
This live programming comes on the heels of the successful run of Warner Bros. and Legendary Entertainment’s “Dune: Part Two” in IMAX locations.

A view shows the logo of the Paris 2024 Olympic and Paralympic Games, in Paris, France, March 19, 2024. 
Benoit Tessier | Reuters

Many of the world’s greatest athletes will make their big-screen debut in IMAX theaters this summer.
NBC announced Friday that its live coverage of the 2024 Paris Olympics opening ceremony on July 26 will play on more than 150 IMAX screens in the U.S.

The Summer Olympics opening ceremony will be the first not held in a stadium. Instead, organizers will send Olympians down the River Seine on a four-mile-long flotilla of nearly 100 boats past iconic sites in Paris.
Ticket prices for the IMAX screenings were not immediately available.
“We look forward to providing our Opening Ceremony coverage to audiences at IMAX locations across the country, sharing in this historic moment as the world regathers to witness the spectacular beginning of 16 days of athletic greatness against the backdrop of one of the most beautiful cities in the world,” Gary Zenkel, president of NBC Olympics, said in a statement.
The live programming follows the successful run of Warner Bros. and Legendary Entertainment’s “Dune: Part Two” in IMAX locations. IMAX has posted global box-office receipts of $103 million for the film, accounting for about 20% of the movie’s total worldwide haul while representing less than 1% of screens, according to a recent report from Eric Wold, an analyst at B. Riley.
Special, limited-time programming such as the Summer Olympics coverage could drive moviegoers to IMAX. Once they’re there, trailers and advertisements for other films or special events could lure them back again. IMAX tickets also carry a premium price higher than that of a traditional movie ticket.

IMAX stock has climbed nearly 6% year to date, last trading at just under $16 a share. However, most analysts think the stock is undervalued. Wold’s price target is $25 a share, just above the analyst average of $21.60, according to FactSet.
Wold said the current price “does not give IMAX any credit” for the fact that its box office is expected to be flat compared with 2023, while the rest of the industry is expected to decline. He also said IMAX is the “only company in this universe” that is projected to generate adjusted earnings in 2025 that top 2019 levels.
“We believe that it is worth a premium,” he said.
The opening ceremony will also be shown on NBC and Peacock.
Programming note: IMAX CEO Richard Gelfond will be on CNBC’s “Power Lunch” at 2 p.m. ET on Friday.
Disclosure: CNBC parent NBCUniversal owns NBC Sports and NBC Olympics. NBC Olympics is the U.S. broadcast rights holder to all Summer and Winter Games through 2032. More

The China-built BYD Seagull, a small all-electric hatchback, starts at just 69,800 yuan (or less than $10,000), and reportedly banks a profit for the increasingly influential Chinese automaker.
There’s fear among global automakers that BYD and other Chinese rivals could flood their markets, undercutting domestic production and vehicle prices.
“Ultimately the Chinese will come to the U.S.,” said Marin Gjaja, chief operating officer for Ford’s EV unit, during a recent interview with CNBC.

A BYD Seagull small electric car is on display during the 20th Shanghai International Automobile Industry Exhibition at the National Exhibition and Convention Center (Shanghai)
Vcg | Visual China Group | Getty Images

LIVONIA, Mich. – A small electric vehicle is having a big impact on the global automotive industry.
It’s not the EV itself that’s making waves but its price — and its potential to disrupt domestic auto industries around the world.

The China-built BYD Seagull, a small all-electric hatchback, starts at just 69,800 yuan (or less than $10,000), and reportedly banks a profit for the increasingly influential Chinese automaker.
That latter point — EV profits where U.S. automakers have mostly failed to turn any — combined with the expansion of Chinese automakers into Europe, Latin America and elsewhere has automotive executives and politicians, from Detroit and Texas to Germany and Japan, on edge.
The Seagull could be a “clarion call for the rest of the auto industry,” said Terry Woychowski, a former General Motors executive who now serves as president of automotive at engineering consulting firm Caresoft Global. “It’s a significant event.”
Though the Seagull isn’t yet sold on U.S. soil, BYD is expanding its vehicles globally, and some believe it’s only a matter of time before more China-made vehicles arrive in the U.S.

Terry Woychowski, president of automotive at engineering consulting firm Caresoft Global, inside the company’s large teardown and benchmarking facility in Livonia, Michigan.
Caresoft Global

There’s fear among global automakers that Chinese rivals like the Warren Buffett-backed BYD could flood their markets, undercutting domestic production and vehicle prices to the detriment of their own auto industries.

“The introduction of cheap Chinese autos — which are so inexpensive because they are backed with the power and funding of the Chinese government — to the American market could end up being an extinction-level event for the U.S. auto sector,” the Alliance for American Manufacturing, a U.S. manufacturing advocacy group, said in a report last month.
BYD sold 1.57 million battery EVs last year, up from just 130,970 all-electric vehicles in 2020. That sales growth was enough to surpass Tesla to become the world’s largest producer of electric vehicles in late 2023.
The rise of BYD and other Chinese automakers led Tesla CEO Elon Musk in January to warn that Chinese automakers will “demolish” global rivals without trade barriers.

Inside Caresoft’s EV area for benchmarking and teardown at its facility in Livonia, Michigan.

Bernstein reports BYD’s growth, including sales of non-EVs, has come by shipping more vehicles outside China: Overseas markets accounted for about 10% of BYD’s more than 3 million sales last year, doubling that share from the beginning of the year.
BYD did not respond for a request for comment.

How the Seagull stacks up

Driving the Seagull is no different than driving the Chevrolet Bolt, Nissan Leaf or BMW i3. It accelerates quickly. It’s quiet. It has nice-looking screens and a mix of plastic and soft touch points, including sporty and comfortable seats.
The Seagull, also known as the BYD Dolphin Mini in Latin America, is slightly smaller than GM’s now-discontinued Chevrolet Bolt EV.
Its reported range of up to roughly 190 miles on a single charge (or 250 miles for certain models), is below that of many EVs on sale today in the U.S. but in line with many first-generation all-electric vehicles. The vehicle’s top speed of about 80 mph and just 74 horsepower dwindle in comparison with most EVs currently on sale in the U.S.
But its primary differences come in the construction, batteries and sourcing of parts, according to Caresoft.

Caresoft, an engineering benchmarking and consulting firm, has already torn down one China-built BYD Seagull and is preparing to do another.
Michael Wayland / CNBC

The consulting firm tore apart the BYD Seagull piece by piece to benchmark the small EV against vehicles from other startups and traditional automakers. The Livonia, Michigan-based company, with several offices across the globe, has torn down and benchmarked more than 30 China-built EVs from the likes of BYD, Nio, XPENG and others.
Caresoft digitally and physically analyzes every part of a vehicle, from bolts and latches to seats, motors and battery casings. It then determines how its clients – mainly automakers and suppliers – can improve efficiencies and cut costs in their products.
Its initial study of the BYD Seagull found it to be efficiently and simplistically designed, engineered and executed, but with unexpected quality and anticipated reliability.
“What they did do is done very well,” Woychowski said. “It’s efficiently done.”
For the price it’s a well-equipped vehicle. (BYD even lowered the starting price of the vehicle by 5% earlier this month, down from a roughly $11,000 price earlier this year.)
Despite the cheap price, the company still makes “some money” on the Seagull or at a minimum breaks even, Caresoft CEO Mathew Vachaparampil said during an automotive conference hosted by the Chicago Federal Reserve in January.

BYD Seagull
Michael Wayland / CNBC

For BYD to sell the Seagull in the U.S., it would have to meet U.S. federal vehicle requirements that would add additional costs to the car. But the EV could likely still arrive on U.S. shores for tens of thousands of dollars cheaper than the current average price of an EV in the U.S., which Cox Automotive reports is more than $52,000.
BYD last month announced it would begin selling the Seagull/Dolphin Mini EV in Mexico for 358,800 pesos (or about $20,990).
BYD has found success in its battery technology; internal sourcing, also known as vertical integration; and production of parts, according to Caresoft. Most notable is BYD’s development of lower-cost battery technologies that are far cheaper to manufacture than lithium-ion batteries commonly used in U.S. EVs.
BYD, which stands for Build Your Dreams, first pioneered its “Blade” battery technologies in smartphones and has since grown into one of China’s most well-known automakers.
Its focus on vehicle efficiencies is reminiscent of U.S. EV leader Tesla, which has likewise been able to drive down the cost of its vehicles over the years.
Traditional automakers are only now attempting to emulate some of Tesla’s processes such as its gigacasting manufacturing process and vertical integration of crucial parts such as motors, batteries and other components. Tesla is also quick to adapt.
The Tesla Model 3, for example, no longer has a floor. Instead, the car’s highly protected battery case takes the place of a traditional vehicle body at the base. That type of change, enacted at Tesla over the last several years, wouldn’t typically take place at a traditional automaker until a full redesign of a vehicle.

BYD Seagull
Michael Wayland / CNBC

BYD is similarly quick to adapt. The company has quickly rolled out new and updated products. It’s also rapidly established manufacturing, as it has its eyes set on factories in Thailand, Brazil, Indonesia, Hungary, Uzbekistan and, potentially, Mexico.
Add in other advantages such as government support, lower labor costs and rising production capacity, and the company poses a growing threat to global counterparts.

Growing concerns

BYD’s rise comes at a precarious time for global auto industry dynamics.
While China’s automakers expand, America’s traditional automakers have shrunk in both their domestic market and China.
Their decline in the U.S. has come with the arrival of Japanese automakers such as Toyota Motor, Nissan Motor and Honda Motor, as well as, more recently, South Korean auto giant Hyundai Motor and its Kia unit.
The so-called Big Three U.S. automakers — GM, Ford and Chrysler, now owned by Stellantis — have watched their U.S. market share deteriorate from 75% in 1984 to about 40% in 2023, according to industry data.
Politicians in the U.S., concerned about their local auto industries, have taken aim at Chinese imports and lawmakers in Europe have launched a probe into the rise of China-made EVs.

U.S. President Donald Trump speaks during a signing ceremony for the U.S.-China “phase-one” trade agreement in Washington, D.C., U.S., on Wednesday, Jan. 15, 2020.
Zach Gibson | Bloomberg | Getty Images

“We are very concerned about China bigfooting our industry in the United States even as we are building up now this incredible backbone of manufacturing,” Energy Secretary Jennifer Granholm said March 6 during a discussion panel at an Axios event.
Republican Sen. Marco Rubio of Florida has proposed sharply boosting tariffs on Chinese vehicle imports by $20,000 per vehicle to stop the country “from flooding U.S. auto markets.”
Currently, Chinese-built EVs are subject to a 27.5% tariff when imported into the U.S. That includes a 2.5% tariff that generally applies to imported cars plus an additional 25% tariff introduced by the Trump administration in 2018 on China-made vehicles.
Chinese automakers could still build in Mexico, though, and import vehicles to the U.S. from there through the USMCA, formerly the North American Free Trade Agreement, or NAFTA.
However, former President Donald Trump – the front-runner among Republicans in the 2024 presidential race – on Saturday suggested instituting a 100% tariff on cars made in Mexico by Chinese companies, should he be elected to a second term.

Employees work on Buick Envision SUVs at General Motors’ Dong Yue assembly plant, officially known as SAIC-GM Dong Yue Motors Co., Ltd., on Nov. 17, 2022, in Yantai, Shandong Province of China.
Tang Ke | Visual China Group | Getty Images

“What we’ve seen over time is automotive manufacturers eventually enter all the markets that matter … Ultimately the Chinese will come to the U.S.,” said Marin Gjaja, chief operating officer for Ford’s EV unit, during a recent interview with CNBC.
Gjaja said while Ford can’t control regulations or Chinese expansion, it can “get really, really competitive on the technologies that customers want” and get more efficient to win customers.
To compete with Chinese brands such as BYD, Woychowski contends traditional automakers must learn, unlearn and change quickly.
He said companies such as the Detroit automakers each have a century of procedures, standards and other workflows that they must rethink to better compete against Chinese automakers before vehicles such as the BYD Seagull land on U.S. shores.
“You have to learn. You have to unlearn and you have to do it quickly,” he said. “Because you’ve been doing something for 100 years, doesn’t mean you should keep doing it. It’s no longer appropriate.”
– CNBC’s Evelyn Cheng and Dylan Butts contributed to this report. More

Nike reported holiday sales that beat expectations, but its growth in China continued to slow.
The company is in the midst of a broad restructuring to cut costs by about $2 billion over the next three years.
Sales in North America grew 3%, higher than analysts had expected.

The Nike logo is displayed at a Nike Well Collective store on February 16, 2024 in Glendale, California. 
Mario Tama | Getty Images

Nike’s China sales continued to slow during its holiday quarter, but the retailer beat estimates on the top and bottom line, helped by better than expected growth in North America and price changes.
Here’s how the company performed in its fiscal 2024 third quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG, formerly known as Refinitiv:

Earnings per share: 77 cents vs. 74 cents expected
Revenue: $12.43 billion vs. $12.28 billion expected

The company’s reported net income for the three-month period that ended Feb. 29 was $1.17 billion, or 77 cents per share, compared with $1.24 billion, or 79 cents per share, a year earlier. Excluding 21 cents per share related to restructuring charges, earnings per share would have been 98 cents, the company said.
Sales rose to $12.43 billion, up slightly from $12.39 billion a year earlier.
In North America, where demand has been unsteady, sales rose about 3% to $5.07 billion, compared with estimates of $4.75 billion, according to StreetAccount.
Meanwhile, sales in the rest of Nike’s regions came in below estimates. In China, sales reached $2.08 billion, just below the $2.09 billion analysts had expected. Revenues in the region climbed 5%, but growth there has decelerated as demand normalizes after Covid-19 lockdowns.
In Europe, the Middle East and Africa, revenue fell 3% to $3.14 billion, worse than the $3.17 billion that analysts had expected, according to StreetAccount. In China, sales grew 5% to $2.08 billion, just below the $2.09 billion analysts had expected. Sales in Asia Pacific and Latin America rose 3% to $1.65 billion, below the $1.69 billion analysts had expected, according to StreetAccount.

Nike shares rose about 5% after its report came out, but later dropped by as much as 7% after it released its guidance for the current quarter and fiscal 2025.
Excluding restructuring charges, the company reiterated its sales outlook for fiscal 2024, and said it expects revenue to grow by 1%, in line with expectations of up 1.1%, according to LSEG. For the current quarter, it expects revenue to be up slightly, compared to estimates of up 2%, according to LSEG.
Nike anticipates gross margins will grow 1.6 to 1.8 percentage points, helped by “strategic price increases, lower ocean freight rates, lower product input costs and improved supply chain efficiency,” finance chief Matthew Friend told analysts.
The improvements are offset by higher markdowns and reduced benefits from Nike’s channel mix, along with foreign exchange headwinds, Friend said. Those shifts in mix are related to changes in how often consumers are shopping online versus in stores or with Nike’s wholesale partners.
For the full year, it expects gross margins to grow about 1.2 percentage points, below the 1.4 to 1.6 percentage point uptick that analysts had expected, according to StreetAccount. 
For fiscal 2025, Nike expects revenue and earnings to grow versus the prior year, but it didn’t say by how much. Analysts had expected revenue guidance of up 5.6%, according to LSEG. 
Friend said Nike is “prudently planning” for revenue in the first half of fiscal 2025 to be down low single digits, reflecting “a subdued macro outlook around the world.” 
As consumers pull back on spending on discretionary items like clothes and shoes, Nike has spent the past few months focused on what it can control: cutting costs and becoming more efficient so it can drive profits and protect its margins. 
In December, it announced a broad restructuring plan to reduce costs by about $2 billion over the next three years. It also cut its sales guidance as it warned of softer demand in the quarters ahead. 
Two months later, it said it was shedding 2% of its workforce, or more than 1,500 jobs, so it could invest in its growth areas, such as running, the women’s category and the Jordan brand.
The early innings of Nike’s cost cuts, which involve simplifying its assortment, reducing management layers and increasing automation, likely helped the retailer beat earnings expectations in the three months ended Nov. 30, even as it missed sales estimates for the second quarter in a row. 
The cuts, along with “strategic pricing actions and lower ocean freight rates,” also contributed to a 1.7 percentage point gain in gross margin — the first time the company saw its gross margin increase compared to the prior year in at least six quarters. 
Nike’s gross margin recovery continued during the quarter. The retailer’s gross margin grew by 1.5 percentage points to 44.8%, driven by “strategic pricing actions and lower ocean freight and logistics costs.” The gains were partially offset by higher product input costs and restructuring charges, company said.
Nike is still considered a market leader in the sneaker and apparel space, but the category has become more crowded and the retailer has had to work harder to compete. Some analysts say its assortment has lost focus and say the company has fallen behind on innovation, giving up market share to newer entrants like Hoka and On Running, as well as legacy brands like Brooks Running and New Balance. 
Last month, Nike launched the Book 1, its latest basketball shoes with NBA star Devin Booker. But the release wasn’t well received because it “looked more like a casual sneaker instead of [a] basketball shoe,” according to a research note from Jane Hali & Associates. 
The firm is now neutral on Nike long term, compared to its previous rating of positive, because it’s unclear where the brand is headed, said senior analyst Jessica Ramirez.
She’s noticed that Nike has removed a lot of products from its offering, which indicates it’s preparing to bring in new styles. But it’s still unclear exactly what those changes will look like.
“They’ve already said [those changes are] going to take some time,” Ramirez told CNBC prior to Nike’s earnings release. “Its a little concerning to know they don’t have a solid plan that we know of yet.”
Read the full earnings release here. More